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Online Travel Industry - India by sdfsb346f

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Online Travel Industry - India

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									Online Travel Industry - India
June 2009
Executive Summary

              Online travel market valued at USD X bn in 2008; Expected to reach USD Y bn by 2011
              Online airline ticket booking share is more than x%
  Market
              Online Travel Agency (OTA) is the most sort after segment by the private equity players with
              investments worth USD xx mn in the past two years
              Drivers:                                      Challenges:




                                 LE
               – Proliferation of internet                         – Low margins & high operating costs
  Drivers &    – Growth in low-cost carriers                       – Poor internet and credit card penetration



                                P
 Challenges    – Secure payment mechanisms
               – Indian Railways online portal




  Trends
                               M
              Competition in online ticket booking is moving away from air to non-air segments



                             SA
              Online travel going mobile: changing e-travel to m-travel
              OTAs looking for offline counters leveraging on their brand value
              Meta search engine is the latest innovation in online travel
              Religious travel is becoming a hot segment in online travel
              Emerging travel information portals backed by OTAs
              Online travel industry will see consolidation in the coming years owing to stiff competition
                           OTA                        GDS                         Meta search engine
                           • Makemytrip               • Amadeus                   • IXIGO
Competition
                           • Yatra                    • Galelio                   • Ezeego1
                           • Cleartrip                • Abacus                    • Zoomtra



                                        ONLINE TRAVEL INDUSTRY – INDIA.PPT                                       2
•Market Overview
•Drivers & Challenges
•Trends
•Competition
•PE Investments
•Key Developments



          ONLINE TRAVEL INDUSTRY – INDIA.PPT   3
 Online travel is a fast emerging business segment in India
 attracting enormous investments from private equity players
 Overview                                                                                    Market Size & Growth
 •Online travel market in India valued at USD X
                                                                                            USD bn
  bn in 2008                                                                                                                                                Z
                                                                                             6                                   x%
 •Online travel bookings are x% of the total USD                                             5                                             Y
  Y bn travel market in India


                                                         LE
                                                                                             4                            X
 •Investments worth USD xx mn made in the                                                    3          W



                                                        P
  Online Travel Agency (OTA) space in past two                                               2
                                                                                             1
  years


 Online Market Share by Channel
              2005                                   SAM  2008
                                                                                             0


                                                                                             Online Travel Penetration
                                                                                                 %
                                                                                                       2008            2009E            2010E            2011E



                                                                                                                                                              E
              z%                                                                            25
         y%                                          z%                                     20
                                                                                            15
                                                    y%                                                                                          D
                                                                 x%                         10
                     x%                                                                                                           C
                                                                                                                     B
                                                                                             5         A
         Supplier Website
                                                                                             0
        Traditional Travel Agents (Via Suppliers)
                                                                                                     2005         2006          2007           2008       2010E
         Online Travel Agents
Source: DNA interview with Scott Blume, APAC Head, Travelocity, Nov 2008; Web Analytics India “Online Travel industry in India”, Jun 2008; Livemint interview with Vish A.
Viswanathan, vice-president, business development, at Sabre Holdings, the parent company of Travelocity, Oct 2007; Expedia news artciles; PhocusWright:

                                                                  ONLINE TRAVEL INDUSTRY – INDIA.PPT                                                                    4
 Airline ticket booking contributes to more than x% of the online
 travel market in India
                                                                      Online Travel


                     Ticket Bookings                    Hotel Reservations                      Car Rentals                   Tour Packages



              Air
                                                        LE
                                                  Non – Air


                                                       P
                                                (Train & Bus)



 Overview
                                                    SA
 • Non-air ticket booking segment is growing fast with
                                                      M                                Online Travel Market Share (2008)
                                                                                                                 Buses/Cars
   the entry of Indian Railways in online space                                                         Hotels
                                                                                                                     Z%\
   (www.irctc.co.in) and many OTAs providing online                                                            Y%\
   bus ticket
 • Large number of hotels have online portals for                                                    Rail x%
   booking their inventory
 • Demand for tour packages have increased both
   among domestic and international tourists
                                                                                                                              W%\
                                                                                                                                    Flights


Source: Press Articles; Study by PhocusWright

                                                                ONLINE TRAVEL INDUSTRY – INDIA.PPT                                            5
Drivers & Challenges




  Drivers
                                                              Challenges
  Proliferation of Internet
                                                              Low Margins & High Operating Costs

  Growth in Low-Cost Carriers                                 Poor Internet and Credit Card
                                                              Penetration

  Secure Payment Mechanisms

  Indian Railways Online Portal




                                  ONLINE TRAVEL INDUSTRY – INDIA.PPT                               6
Trends

            Competition in online ticket booking is moving away from air to non-air segments



            Online travel going mobile changing e-travel to m-travel



            OTAs looking for offline counters leveraging on their brand value
 Trends `
            Meta search engine is the latest innovation in online travel



            Religious travel is becoming a hot segment in online travel



            Emerging travel information portals backed by OTAs


                                ONLINE TRAVEL INDUSTRY – INDIA.PPT                             7
 Online travel industry is over crowded with many new players
 entering the market
 Overview                                                                                    Revenues* of major OTAs (Mar 2008)
 •Online travel market is the most crowded                                                                 0           5              10        15          20
  arena in the E-commerce segment with many                                                                                                                      USD mn
                                                                                           Makemytrip                                                   x
  new players entering this space
 •Makemytrip, Yatra, Cleartrip and Travelguru                                                      Yatra                          y




                                                        LE
  are the leading players in the OTA segment                                                   Cleartrip                 z
                                                                                                                                                  More than x%
                                                                                                                                                  market share in
 •IXIGO, Ezeego1 and Zoomtra are the leading
  meta search engines in online travel

                                                      MP                                     Travelguru           w                                gross sales




                                                     A
 •With the existing competition online travel                                                 *Revenues through commissions on gross sales
  space is sure to see consolidation in the
  coming years
 •One can expect numerous acquisitions and
  buyouts to happen as cash rich international
                                                    S                                        GDS market share India

                                                                                                                    Abacus
                                                                                                                              WorldSpan

                                                                                                                             z%
                                                                                                                                  w%
  players are entering the market
 •Added to that airline companies like SpiceJet,
                                                                                                                                                x% Amadeus
  IndiGo and KingFisher in India are coming up
  with their own portal Rang7, which will affect                                                                      y%
                                                                                                           Galileo
  OTA’s

Source: Travel Biz Monitor interview with David Brett, President (Asia Pacific), Amadeus, Jan 2009; Business Outlook India “Going places “, May 2008

                                                                  ONLINE TRAVEL INDUSTRY – INDIA.PPT                                                                  8
                     Thank you for the attention
The Online Travel report is a part of Research on India’s Tourism Industry Series.
For more detailed information or customized research requirements please contact:
Natasha Mehta, CFA                                                             Gagan Uppal
Phone:         +65 8448 0449                                                   Phone:         +91 98364 71499
E-Mail:        natasha.mehta@netscribes.com                                    E-Mail:        gagan.uppal@netscribes.com

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                                                       ONLINE TRAVEL INDUSTRY – INDIA.PPT                                                        9

								
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